Solutions for Large Donations
The Advantages of a Charitable Remainder Trust
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Looking for a way to give the College a significant gift? If you have built up a sizeable estate and are also looking for ways to receive reliable payments, you may want to check out the advantages of setting up a charitable remainder trust.
Benefits of a charitable remainder trust include:
- Potential for a partial charitable income tax deduction
- Potential for increased income
- Up-front capital gains tax avoidance
There are two ways to receive payments with charitable remainder trusts:
The unitrust pays you, each year, a variable amount based on a fixed percentage of the fair market value of the trust assets. The amount of your payments is redetermined annually. If the value of the trust increases, so do your payments. If the value decreases, however, so will your payments.
The annuity trust pays you, each year, the same dollar amount that is established at the start. Your payments stay the same, regardless of fluctuations in trust investments.
Check Out This Potential Scenario
Susan wants to make a gift to the College but would also like more income in the future. Susan creates a charitable remainder unitrust with annual lifetime payments to her equal to 5% of the fair market value of the trust assets as revalued annually. She funds the trust with assets valued at $500,000.
Susan receives $25,000 the first year from the trust. Subsequent payment amounts vary each year depending on the annual valuations of the trust assets. She is eligible for a federal income tax charitable deduction of $303,245* in the year she creates and funds the trust. This deduction saves Susan $97,038 in her 32% tax bracket.
*Based on a 5.2% charitable midterm federal rate. Deductions and calculations will vary depending on your personal circumstances.
Retired Engineer Shares His Love of the Liberal Arts With Students in the Sciences
When George Guerin '51 and his wife Marijke were looking to invest some Kellogg stock they had accumulated over the years, the couple decided to invest in the education of Grinnell students in the sciences. They chose to do so through two planned giving vehicles — a Charitable Remainder Trust (CRT) and a Charitable Gift Annuity (CGA). These allow the Guerins to transfer stock to Grinnell and fund a scholarship, while providing them tax deductions plus quarterly income.
Guerin is a retired engineering and project manager who spent nearly three decades working for Kellogg's. He named the Grinnell scholarship is named in honor of his father, Herbert Guerin, who set George on the path of broadening his mind through the liberal arts.
"My father interviewed and recruited engineering students for the company he worked for, and he felt many didn't have enough knowledge in English, philosophy, or the fine arts to communicate properly," explained Guerin.
Calculate Your Benefits
Submit a few details and see how a charitable remainder trust can benefit you.
- Contact Buddy Boulton at 866-850-1846 or PG@grinnell.edu to talk about supporting the College by setting up a charitable remainder trust.
- Seek the advice of your financial or legal advisor.
- If you include the College in your plans, please use our legal name and federal tax ID.
Legal Name: Trustees of Grinnell College
Address: 733 Broad Street, Grinnell IA 50112
Federal Tax ID Number: 42-0680387
Information contained herein was accurate at the time of posting. The information on this website is not intended as legal or tax advice. For such advice, please consult an attorney or tax advisor. Figures cited in any examples are for illustrative purposes only. References to tax rates include federal taxes only and are subject to change. State law may further impact your individual results. California residents: Annuities are subject to regulation by the State of California. Payments under such agreements, however, are not protected or otherwise guaranteed by any government agency or the California Life and Health Insurance Guarantee Association. Oklahoma residents: A charitable gift annuity is not regulated by the Oklahoma Insurance Department and is not protected by a guaranty association affiliated with the Oklahoma Insurance Department. South Dakota residents: Charitable gift annuities are not regulated by and are not under the jurisdiction of the South Dakota Division of Insurance.